India's exports up 7.33 per cent at $ 27.72 billion in July

NEW DELHI: Exports rose for the fourth straight month in July, benefiting from a stronger global economy, and non-oil, non-gold imports gathered pace, offering another sign that the economy is looking up.

Exports during the month increased 7.3 per cent to $27.73 billion and imports went up 4.25 per cent to $40 billion, leaving a trade deficit of $12.2 billion, the highest since July last year, the data released by the commerce and industry ministry on Thursday of showed.

Trade deficit was $11.76 billion in June and $12.5 billion in July last year.

"There is nothing to worry on the trade deficit front till oil prices remain low. If EU and US recovery continues, no matter how mild, our exports will post a healthy growth," said DK Joshi, chief economist, Crisil.

However, exports of gems and jewellery fell 17.42 per cent despite easing of gold import norms.

July saw higher order flows into India mainly on account of an improvement in the US economy, which accounts for about 10 per cent of India's exports.

"Global trade scenario is improving with positive developments in the EU, US and emerging economies. In the coming months, exports should reflect these developments. We can cross $350 billion of exports in 2014-15 as manufacturing is expected to pick up," said M Rafeeque Ahmed, president, FIEO.

The government is expected to announce a five-year foreign trade policy (2014-19) by end of month that will not only focus on enhancing exports, but also boosting domestic manufacturing.

The first four months of the fiscal saw an 8.6 per cent cumulative growth in exports.

Higher import of petroleum and electronic goods added to the $40 billion import bill, widening the trade gap. India imported $1.9 billion of gold in July, down 26 per cent from the year-ago month. In June, gold import had touched $3.3 billion.

India's current account deficit, which had touched a historic high of 4.7 per cent of GDP in 2012-13, narrowed sharply to 1.7 per cent of the GDP in 2013-14 after the UPA government raised customs duty on gold from 2 per cent to 10 per cent in stages, and the RBI brought in the stringent 80:20 rule for imports.

Non-oil non-gold imports were up 4.5 per cent, suggesting a pickup in domestic economy as suggested by higher industrial production growth of 3.9 per cent in the first quarter.